In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.32 per cent, down from last week when it stood at 6.42 percent. A year ago, the average was 4.67 per cent.
In addition to tumbling rates, Freddie Mac also highlighted falling house prices which was leading borrowers back into the market.
Sam Khater, Freddie Mac’s chief economist, said: “Economic uncertainty continues to bring mortgage rates down.”
“Over the last several weeks, declining rates have brought borrowers back to the market but, as the spring homebuying season gets underway, low inventory remains a key challenge for prospective buyers.”
Meanwhile, the 15-year fixed rate mortgage averaged 5.56 per cent, down from last week when it averaged 5.68 per cent. A year ago at this time, the average was just 3.83 per cent.
A buyers’ market
A separate weekly survey from the Mortgage Bankers Association (MBA) also found that 30-year rates were falling, along with their 15-year equivalents.
The MBA reported that the interest rate for 30-year fixed rate mortgages dropped to 6.45 per cent from 6.48 per cent a week earlier, while the average rate for the 15-year equivalents fell to 5.84 per cent from 6.02 per cent a week ago. And, encouragingly, applications were also up.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Application activity increased as mortgage rates declined for the third straight week. The 30-year fixed rate declined to 6.45 per cent, the lowest level in over a month.
“While the 30-year fixed rate remained 1.65 percentage points higher than a year ago, homebuyers responded, leading to a fourth straight increase in purchase applications. Home price growth has slowed markedly in many parts of the country, which has helped to improve buyers’ purchasing power.
“Purchase applications remain over 30 per cent behind last year’s pace, but recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.”
